Stocks are enjoying a robust rally Monday after the one shred of economic data out in the U.S. today beat expectations. The Empire State Purchasing Managers index blew away the Street’s forecasts, and that has been enough to send markets strongly higher. At midday, the S&P/TSX index is up 48 points at 7,058.

Volume is on the soft side at 104.6 million shares, with the buying beating the selling by a 27:22 margin. Market breadth is also decidedly bullish, with winners outnumbering losers 11:8.

On a sector basis, the rally is broad-based, with almost every sector making some sort of gain. Health care is the only group reporting a tiny decline. Telecoms are leading the way higher, gaining 1.9%. There is also buying in real estate, financials and consumer stocks.

CIBC and TD Bank are powering the banks higher, both gaining about 2% at midday. There is also strength in Royal Bank, up 1.2%.

Naturally, BCE is driving the telecom rally. It has gained 1.8% in active trading. And, Manitoba Telecom is up 3.5%.

Air Canada is enjoying a 10% recovery in its stock price. And, there are gains in CanWest Global, EnCana, Cinram, Nevsun, Open Text, Dalsa, Ballard Power and Ipsco.

Nortel is leading the downside, dropping 2.5% in active trading. there is also weakness in ATI Technologies, Bombardier and Biomira. On the resource side, Crytallex is down, as is Ketch Resources, Provident Energy Trust and Glamis Gold.

In New York, a hopeful economic signal sent stocks higher on the open, and the rally has continued throughout the day. At midday, the Dow Jones industrial average is up 148 points at 9,265. The S&P 500 has added 17 points to 1,005. The Nasdaq composite index is enjoying a 30 point gain at 1,656.

Even the small caps are posting a modest gain, with the S&P/TSX Venture index three points higher at 1120. Volume is quite strong at 21.9 million shares. TM Bioscience is the day’s top trader, up 6% on heavy trading of almost 4 million shares.